March 12, 2013 | 1 comment | 507 views
Middle Bay lease put up for auction
Minimum bid to operate country club is $2.6 million
Despite rumors making the rounds in Oceanside that the Middle Bay Country Club, which was devastated by Superstorm Sandy, would be sold and turned into luxury condominiums, federal court records show only that the lease to operate the golf course and catering facility was to be sold at auction.
The auction, to be overseen by a court-appointed Chapter 7 bankruptcy trustee, Kenneth Kirschenbaum, and auctioneer Richard Maltz, was scheduled for Tuesday, after the Herald went to press.
According to court documents, the 143-acre property is owned by J.W. Mays department store heir Lloyd Shulman and is leased to the Middle Bay Golfers’ Association for about $500,000 a year. There are 13½ years left on the lease.
Before the storm, Middle Bay, which was founded in 1964, had 230 members, and its catering facility was used by many local organizations as well as for weddings and other functions. Club officials say that most of its golf members have gone elsewhere, to other courses in the county.
Maltz told the Herald that there is “some interest” in the lease, and that he had shown the property to a number of prospective bidders in past weeks.
“Will they show up for the auction?” he said. “You never know until you get into the room.”
Maltz said that the opening “key money” bid — the minimum necessary to take home the key and the lease — would be $2.6 million, but he added that $2 million would be held in escrow and eventually used for needed course repairs and the renovation of the clubhouse catering facility.
“The catering facility is the biggest hook,” Maltz said. “There are great views right on the water.”
The fact that only the lease, and not the land itself, is being auctioned off makes it highly unlikely that the land would be turned into housing, a federal court spokesman said. “The lease allows only for a golf course and catering facility,” he said, “and the winning bidder will most likely be restricted to that use.”
In addition to the lease restrictions, local officials said that at least half of the property is situated on restricted wetlands, where large-scale construction would not be allowed.
Court documents show that a Chapter 7 petition was filed on behalf of the board of the golfers’ association on Jan. 23. According to the federal bankruptcy website, a Chapter 7 bankruptcy does not involve the filing of a plan of repayment, as is the case with a Chapter 13 filing. Instead, a trustee sells the debtor’s assets and uses the proceeds to pay creditors.
The bankruptcy proceedings are being overseen by Judge Dorothy Eisenberg, a federal bankruptcy judge in the Eastern District of New York.
Maltz said earlier this week that he would speak about the auction as soon as he received permission from Kirschenbaum.